Correlation Between Salesforce and Petrofac
Can any of the company-specific risk be diversified away by investing in both Salesforce and Petrofac at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Salesforce and Petrofac into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Salesforce and Petrofac Ltd ADR, you can compare the effects of market volatilities on Salesforce and Petrofac and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Salesforce with a short position of Petrofac. Check out your portfolio center. Please also check ongoing floating volatility patterns of Salesforce and Petrofac.
Diversification Opportunities for Salesforce and Petrofac
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Salesforce and Petrofac is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Salesforce and Petrofac Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Petrofac ADR and Salesforce is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Salesforce are associated (or correlated) with Petrofac. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Petrofac ADR has no effect on the direction of Salesforce i.e., Salesforce and Petrofac go up and down completely randomly.
Pair Corralation between Salesforce and Petrofac
Considering the 90-day investment horizon Salesforce is expected to generate 0.22 times more return on investment than Petrofac. However, Salesforce is 4.57 times less risky than Petrofac. It trades about 0.23 of its potential returns per unit of risk. Petrofac Ltd ADR is currently generating about -0.02 per unit of risk. If you would invest 29,640 in Salesforce on August 31, 2024 and sell it today you would earn a total of 3,361 from holding Salesforce or generate 11.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Salesforce vs. Petrofac Ltd ADR
Performance |
| Timeline |
| Salesforce |
| Petrofac ADR |
Salesforce and Petrofac Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Salesforce and Petrofac
The main advantage of trading using opposite Salesforce and Petrofac positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Salesforce position performs unexpectedly, Petrofac can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Petrofac will offset losses from the drop in Petrofac's long position.| Salesforce vs. Zoom Video Communications | Salesforce vs. C3 Ai Inc | Salesforce vs. Shopify | Salesforce vs. Workday |
| Petrofac vs. Worley Parsons | Petrofac vs. Saipem SpA | Petrofac vs. SMG Industries | Petrofac vs. Bri Chem Corp |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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